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Ustocktrade Review 2017 – Peer-to-Peer Stock Trading

Review of: Ustocktrade

Reviewed by: Kevin Mercadante

Last modified: October 23, 2017

Rating:

6/10

Ustocktrade is an interesting concept, creating a truly community-based investment platform. It may be ideal for new and small investors, as well as early adopters, since the fees are very low and there are no account minimums. However, the service will probably be of very limited use to larger, more sophisticated investors.

Commissions & Fees

9.5/10

Customer Service

8/10

Ease of Use

7/10

Tools & Resources

7.5/10

Investment Options

5/10

Account Options

Based in Newton, Mass., Ustocktrade is an alternative trading system (ATS) operating under the motto “Wall Street to Main Street.” The platform offers peer-to-peer stock trading without the use of an outside broker to facilitate the trade. Instead, Ustocktrade matches buy and sell orders within its own network. By eliminating the use of brokers, Ustocktrade can keep member fees to a low monthly charge of just $1, with $1 trades. In addition, they can also provide faster settlement, enabling investors to get the most favorable price on a security.

The company is a startup, having begun operations in 2015, but the trading platform was launched at the beginning of 2016 by Tony Weeresinghe, the former head of global development for the London Stock Exchange Group. Weeresinghe is self-funding Ustocktrade.

The Ustock name is derived from “You Stock Trade.” The startup’s trades are limited to stocks listed on U.S. exchanges, and the site is aimed at college students and other novice investors. Users must link their Ustocktrade accounts to their bank accounts.

The company was actually created to provide financial support for The Cainan Foundation, which is a 501(c)(3) tax-exempt organization. The foundation is dedicated to educating some of the world’s most disadvantaged kids. It operates by building self-sustaining boarding schools and provides a first-rate education to vulnerable and disadvantaged children throughout the world.

Ustocktrade Features

Minimum Investment

$0

Stock Trades

$1/trade + $1/monthly

Options Trades

N/A

Mutual Funds

N/A

Investment Types

Stocks, ETFs

Accounts

Taxable

Joint

Roth IRA

Traditional IRA

Rollover IRA

Custodial

SEP IRA

SIMPLE IRA

401(k)

Solo 401(k)

Trusts

Limited Parternships

Partnerships

Non-Profit

529

Coverdell

Annuities

Checking

Savings

Money Market

CDs

Access

Website, iOS App, Android App

Broker Assisted Trade

Virtual Trades

No Fee ETFs

Customer Service

Email

Promotions

None

How Does Ustocktrade Work?

Same Day Trade Settlement — Ustocktrade operates through what it refers to as “T+0.” Securities trades handled by traditional brokers will take up to three days to settle into your account; this is referred to as “T+3.” This can make it difficult if you want to buy and sell multiple stocks on the same day, since your sales proceeds will not be available for three days.

Since Ustocktrade matches trades internally within the network, they can provide same-day settlement at no additional cost — that is T+0. That means any security sales you complete will provide immediate availability of funds to buy new investment positions.

Exchange-Traded Notes (ETNs) — These are funds, similar to exchange-traded funds (ETFs), in which you purchase shares in debt instruments issued by financial institutions, where performance is linked to the credit rating of that institution as well as a specific index.

Trading Simulator — Ustocktrade enables you to practice trading with zero risk. The trading simulator is free to use, and it provides you with virtual cash to practice investing using real-time market data. This will help you prepare for real-world investing activity without risking any of your own money.

Available investments — Ustocktrade currently permits you to invest in most equity securities listed on U.S. stock exchanges. They also allow you to invest in 92 ETFs, as well as eight ETNs.

Maximum Deposit — There is no minimum required. There is, however, a maximum trading limit of $10,000 on any order you buy or sell. The purpose of this is to limit the use of the platform to retail investors, rather than by large, professional investors or by high-frequency traders. As noted above, Ustocktrade is aimed at college students and novice investors.

Pricing

Customer Account Transfer In from another broker (ACAT and Non-ACAT): No fee, though this option is not yet implemented

Account Transfer Out (ACAT and Non-ACAT) to another broker: $40

Returned Bank Fund Transfer (ACH Items): $20

Screenshots

Ustocktrade was created to help college students and other novice investors trade U.S. stocks

Ustocktrade's mobile app makes stock transactions easy

Tailor your trading strategy with Ustocktrade's mobile interface

Monitor your investing portfolio from your mobile device

Ustocktrade ‘Superusers’

Ustocktrade is a platform that involves primarily small investors. However, as a network trading platform, it does welcome larger investors who can function as market makers within the network. These market makers are referred to as Superusers.

Superusers help to satisfy the minimum capital requirements for the platform and provide liquidity in securities traded through the trading system. They are expected to fill marketable customer orders if those orders cannot be matched with other investors within the network.

However, the possibility exists that Superusers may be unable or unwilling to take the counter side of an investment transaction. This means they are not guarantors of liquidity in any sense of the term. This can mean that investor orders are either not executed or not executed on a timely basis.

As Ustocktrade is still essentially a startup, the platform has just one Superuser — the Ustocktrade chief executive officer. That does present the possibility of interruptions in trading activity. As the platform grows, the expectation is that more investors who qualify as Superusers will participate in the service.

Pros and Cons

Pros

Very Low Fees — At $1 per month and $1 per trade, Ustocktrade is probably the lowest-priced investment trading platform available.

No Minimum Balance — This is a major advantage to new and small investors.

Very Fast Trade Executions — This is as close to real-time trading as it gets for small investors.

Being Part of an Investment Community — Ustocktrade is a peer-to-peer (P2P) trading platform, which makes users part of a close-knit community.

Supporting a Charity via Investing — The proceeds generated on the platform go to funding a very worthy cause.

Cons

Cannot Transfer Existing Securities — Investments from other brokers will have to be converted to cash before transferring them to Ustocktrade.

Orders Capped at $10,000 per Trade — This limit will effectively exclude large investors.

Your Account Must Be Linked to a Bank Account — You won't have the option to keep your bank account and investments completely separate if that's your choice.

No Short-Selling or Margin Trading — In case these interest you, they are not available on the platform.

Email Contact Only — No other form of communication is indicated at this time.

No Retirement Accounts — Ustocktrade currently permits only regular taxable investment accounts, and no IRAs or similar accounts

Superusers — Given the closed network nature of the platform, this has the potential to lead to liquidity issues, particularly in volatile markets.

Summary

Ustocktrade is an interesting concept, creating a truly community-based investment platform. It may be ideal for new and small investors, as well as early adopters, since the fees are very low and there are no account minimums. However, the service will probably be of very limited use to larger, more sophisticated investors.

Ustocktrade is a unique trading platform that may have an outstanding future. It gets high marks for same-day trade settlements, as well as extremely low fees. But as a startup operation, there are currently a lot of limitations and open questions.

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B

7 months 7 days ago

Hey! thank you for this review. In doing some research I noticed people said UST has switched from T0 to T3. This was back in 2016 and this year their twitter has discreetly mentioned changes As you recently updated the review, did they switch back to T0?

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Michael Brown

4 months 18 days ago

They switched back to T+0. Instant settlement and no PDT rule so unlimited trades. I’m in and out of stocks all day long. I know this is late but thought it might still help someone.

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SmartMan

1 year 2 months ago

Thank you for the review. Can I do many day trades or they have day trading limitations? (I.e day trading pattern and 25k minimum )

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